Land ownership for Foriegners

Post by **old timer** » August 5, 2015, 3:09 pm

This subject has come up again in another thread. OT was shot down when saying that there are no favorable terms for which Americans can own land in Thailand.
Now I am unsure if in fact I was correct or not. I was informed that an American can have the majority ownership of a Company and that Company can buy land in Thailand which is true, but that doesn't mean that the American will have the majority ownership of the land when it comes to buying through that Thai Registered Company. I think?
So I checked it out:

Land Code Promulgating Act, B.E. 2497 (1954)

CHAPTER 9

Limitation of Rights in Land of Some Categories of Juristic Persons

Section 97 The following juristic persons shall be entitled to the same rights as the foreigners.
1.Limited companies or the public limited companies with registered shares held by foreigners more than forty nine percent of the registered capital or those in which foreign shareholders account for more than half of the total number of shareholders, as the case may be. For the purpose of this Chapter, any share certificate to bearer issued by the limited company shall be deemed as it is held by the foreigner.
2.Registered limited partnerships or the registered ordinary partnerships in which the foreigners invest their capital through shareholding greater than forty nine percent of the total capital or those in which foreign shareholders account for more than half of the total number of shareholders, as the case may be.
3.Associations including the co-operatives in which the foreign members exceed one-half of the total number of members or those which operate particularly or mainly for the benefit of foreigners.
4.Foundations with objectives focusing particularly or mainly on the benefit of foreigners.
5.(Repealed)

This Act clearly says that Companies with foreign shareholders holding more than 49% will have the same rights as foreigners. So is OT correct in saying that if an American owns more than half the shares of a Company, that Company will have the same rights as other foreigners? I don't disagree that an American can own more than half of a Thai Registered Company, however I do disagree that an American can buy land through a Thai Company on favorable terms compared to any other foreigners.

OT.................... $\:D/$

Post by **can123** » August 5, 2015, 4:32 pm

I agree. There is no procedure which can bypass present legislation which is designed to assert that only Thais may own land in Thailand.

I would advise long term residents of Thailand to try for citizenship. Long and protracted but the only way to really own land.

Post by **wazza** » August 6, 2015, 5:33 am

I understand that an Expat can have eg 49% of a Thai Company, be appointed as a Director of that Company and then the articles of association of that company can have the expat as having priority / vested voting rights under the companies constitution allowing them to control any AGM or meeting that is required to formally have minutes recorded if its sold or changes to the % of shareholders etc

Its not ownership of the land, but it is legally a way of keeping control of the house and land. Assuming you have the title transferred into the company name also. so the expat must be involved with any sale or transfer of the property , and formally signing off on it.

Post by **fatbob** » August 6, 2015, 7:39 am

OT, a person from the US who has a company in Thailand can own a majority, 51%, as a director of his company he is now in control of all decisions with majority voting rights. Me as an Australian can own 49%, 51% must be Thai, normally the 51% will be divided into two, 48% & 3% amoung two Thai's who do not know each other from opposite ends of the country effectively giving me control.
A foreigner buying land in Thailand doe's so through his Thai company, the Thai company owns the land and rents it to the foreigner. The Thai company owned by the guy from the US is ok as he has control of his company and his land with his 51%, the guy from Aus is always looking over his shoulder hoping the two Thai's don't get to know each other and take his land through there 51% majority.

Post by **old timer** » August 6, 2015, 4:24 pm

coxo wrote:OT, a person from the US who has a company in Thailand can own a majority, 51%, as a director of his company he is now in control of all decisions with majority voting rights. Me as an Australian can own 49%, 51% must be Thai, normally the 51% will be divided into two, 48% & 3% amoung two Thai's who do not know each other from opposite ends of the country effectively giving me control.
A foreigner buying land in Thailand doe's so through his Thai company, the Thai company owns the land and rents it to the foreigner. The Thai company owned by the guy from the US is ok as he has control of his company and his land with his 51%, the guy from Aus is always looking over his shoulder hoping the two Thai's don't get to know each other and take his land through there 51% majority.

Ok, got it.

OT.................. $\:D/$

Post by **old timer** » August 7, 2015, 12:52 am

old timer wrote:
coxo wrote:OT, a person from the US who has a company in Thailand can own a majority, 51%, as a director of his company he is now in control of all decisions with majority voting rights. Me as an Australian can own 49%, 51% must be Thai, normally the 51% will be divided into two, 48% & 3% amoung two Thai's who do not know each other from opposite ends of the country effectively giving me control.
A foreigner buying land in Thailand doe's so through his Thai company, the Thai company owns the land and rents it to the foreigner. The Thai company owned by the guy from the US is ok as he has control of his company and his land with his 51%, the guy from Aus is always looking over his shoulder hoping the two Thai's don't get to know each other and take his land through there 51% majority.
Ok, got it.

OT.................. $\:D/$

Got it but disagree.
OT would like to see an example of what you are saying, as my boss would say to me.
First point is that it would be a pretty stupid Falang that "hopes" or is banking on that the two Thai majority shareholders of his land/investment/home didn't meet, ever. Knowing the way Thais work, I'm sure these Thai shareholders would know about the status of their belongings
Secondly, let's take the American scenario you described, of him being the majority shareholder of a Thai registered Company and his company buying land in the LOS. Still after researching this slightly I have not seen anything that says that his Company can buy Thai land with him being the majority shareholder thus being mostly the owner. All the information I have seen points to the fact that whatever you attempt through Thai Registered Copanies or as an individual, a foreigner can not buy and own land in Thailand.
Lets not talk about big business here because that is not relevant. Let's talk about the typical expat. Maybe you have an example of what you are saying and I am all ears.

OT................... $\:D/$

Post by **parrot** » August 7, 2015, 2:56 am

I wonder if there's an exception for Chinese investors.....strictly land. If anyone could figure out a way around the rules (still in compliance.....or not), I'd expect the Chinese to find a way.

Somewhat off topic, Paul Simon said there were 50 ways to leave you lover.....and I can only find 50 exceptions to the i before e except after c rule. Foriegner isn't one of them. Just yankin' your chain, OT.

Post by **fatbob** » August 7, 2015, 6:34 am

I have been building in Thailand for eighteen years and that is how its done. Up to you if you think its right or wrong, go and ask a lawyer, they are the ones that set this up, I don't have the time.

Post by **glalt** » August 7, 2015, 9:09 am

The bottom line here is that if the government ever decides to enforce the existing laws, there will be thousands of foreigners wailing and gnashing their teeth. As I see it, the government may never enforce the law because these bogus companies hire lawyers, accountants and pay taxes on these companies.

Lawyers will write any kind of contract the customer wants, legal or not. As for myself, I like to sleep well at night and would never go a company route. To each his own. The laws are quite clear. A foreigner CANNOT own land.

Post by **wazza** » August 7, 2015, 9:26 am

Galt not quiet correct there.

The Company always owns the land not the foreigner, the land title clearly shows that.

The Land Tittles Office ensures that no foreigner owns any land title.

Post by **glalt** » August 7, 2015, 11:05 am

The company owns the land, BUT, it is likely that the company is not legal. You cannot use nominees.

Post by **wazza** » August 7, 2015, 11:36 am

Galt.

Incorrect. Sorry.

The SME office firstly checks the registration of the company inc the % of the Thai to Expat. Plus Director status. Plus the company constitution etc...

U then finally receive your company registration and tax number.

Should the company buy a property even the capital of the company is checked against the purchase price of the property.

If your company is for eg 3,000,000 and you try to buy a property for 5,000,000 . U have to show where the funds came from. Expat funds not elligible. Thais must show this. Registered mortage or loans.

The company also needs to show the cash flow and tax returns to support the purchase. To ensure tax is paid correctly.

Land office can still veto according to incorrect documentation or if they believe the transfer of title doesnt meet the business portfolio of the registeted company.

You might be confused perhaps with condos where the overall % of the condos must still be 51% thai. And some developers selling to expats even when Thai % was less than 51%. Many of those proposed sales to other expats have been veoted recently unless the sale was to a Thai.

Post by **fatbob** » August 7, 2015, 11:37 am

It is a simple method to understand: A foreigner cannot own land in Thailand. A THAI company can own land. A foreigner can own a Thai company! The foreigner sets that company up legally so he has voting rights.

A Thai company with an Australian DIRECTOR (not nominee) owning 49% and two Thai DIRECTORS controlling 48% and 3%.

A Thai company with an American DIRECTOR owning 51% with one or more Thai DIRECTORS controlling 49%.

It is the company that owns the land, A THAI COMPANY, not the individual, it comes down to voting rights. This is how the many thousands of foreigners control the ownership of their houses in Thailand at present, like it or lump it that is how you do it, the only alternatives are 30 year lease or buy a Condo freehold.

Post by **wazza** » August 7, 2015, 11:49 am

Correct Coxo

The 30 year or 60 or 99 ? Lease os called a Ursafruct. The land title is still in the name of a Thai.

Its registered at the land office and allows occupancy by law for thecterm of the registeted agreement.

No mortage is allowed to be registered whilst a ursafruct is on the title. If the land is sold without the occupier knowing and eviction sought. The thai court will rule in favour on the ursafruct as it did in Surin a year or so ago. The occupier simply produced his registered copy of the ursafruct in court and Judge ruled in the expats favour.

Post by **Bonanza** » August 8, 2015, 12:26 am

In 2007, the organisation that I worked for (American) was interested in a joint venture in Thailand, where the companies investment was in excess of $150 million. Our lawyers spent over three months with Thai lawyers etc, but the venture did not go ahead because our company could only hold 49% of the shares. If anyone can show a Thai law that gives the non-Thai a majority holding I'm sure that there would be many interested parties.

Post by **the-monk** » August 8, 2015, 8:54 am

I am not sure but i think that the 51 % Thai ownership rule applies ONLY to certain economic sectors, industries such as banking. etc... In some other spheres of activities it might be possible to have a foreigner holding a majority position in a company, i recall reading that it was the case of Japan Toyota .. I could be wrong i am just an observer here.
Nice day to all...

Post by **pf-flyer** » August 8, 2015, 9:38 am

the-monk wrote:I am not sure but i think that the 51 % Thai ownership rule applies ONLY to certain economic sectors, industries such as banking. etc... In some other spheres of activities it might be possible to have a foreigner holding a majority position in a company, i recall reading that it was the case of Japan Toyota .. I could be wrong i am just an observer here.
Nice day to all...

I asked several months ago at the land office in Nong Han. The answer was a definite no, only Thai citizens are permitted to own land. I was told my only options in Thailand were a 30 year lease or usufruct. I have been told by other farangs that
some land offices are not processing usufructs.

Post by **fatbob** » August 8, 2015, 9:56 am

Please resd what is written, a foreigner cannot own land, a Thai company can, a Thai company owned by a foreigner.

Post by **glalt** » August 8, 2015, 10:08 am

As they say here in Amazing Thailand, UP TO YOU. Go ahead and pay a lawyer to set up your bogus company. Then pay an accountant and taxes. Good luck and hope for the best.

Post by **kubotatim** » August 8, 2015, 10:10 am

Well said Gary.